Against forecasts, last Friday the 13th turned out to be Kevin Rudd’s lucky day, when a few minutes after midday his $42 billion economic stimulus package finally bought its way through Parliament.
It followed a last-minute compromise with the South Australian independent Senator Nick Xenophon, whose vote had led to its rejection in the Senate on Thursday. That had left Parliament in deadlock on the plan. Rudd expressed shock. He said no other parliament anywhere had rejected a similar stimulus package since the collapse of Lehman Brothers really kicked off the global economic crisis last September.
But the Government moved swiftly to recover from the setback. It took its proposed stimulus package back to the House of Representatives late yesterday, and went to work bargaining with Xenophon.
Those talks broke the impasse. By the time the Government sent the package back to the Senate, Xenophon had switched sides, and the stimulus package was passed.
It’s a deal that will produce quite a few winners besides the Prime Minister. They will include thousands in construction and related industries who stood to lose their jobs as the economic crisis cut the legs off that sector.
Thousands of low income families will also receive the big payments that the package had promised them, although those payments will now be shaved slightly. And last but not least, the stricken Murray-Darling will benefit from increased water flows.
Senator Xenophon had held out for a better deal for the Murray-Darling, which he had described as "the food bowl of Australia", and the Government finally relented, offering an extra $900 million to buy back the rights to more of the system’s water, harvest stormwater and improve water efficiency. But Senator Xenophon comromised, too: that $900 million was well short of the $3.1 billion that he had been demanding. The Government, though, has also promised further water buybacks as circumstances permit.
Xenophon hasn’t done too badly. Politically he looks like he has stuck to his principles, rather than held the country to ransom as a single-issue crackpot. He can reasonably claim not to have switched sides, but rather to have stayed on the same side as the Murray-Darling Basin and the people who depend on it.
The support of the Greens also came at a price. Among their wins were a better deal for pensioners, and money for bike path projects and grassroots job creation initiatives. The payments the Government had planned for single income income families and others will be shaved from $950 to $900.
Even so, this outcome was a political triumph for Rudd. It means that he can continue to blame Malcolm Turnbull for recklessly attempting to block the package, sabotaging thousands of jobs and the entire Australian economy on the brink of a recession.
Rudd was jubilant in Parliament. "The irresponsible thing to do today would be to play politics at a time when we are required to put our nation first," he said. He heaped praise on the minor parties and independents who had helped to produce this result. "And I thank them for their co-operation," Rudd said.
There were smiles all round in Canberra on Friday as the compromise was reached. Australia’s churches were one of the many groups pleased at the outcome. They had earlier released a very blunt joint statement in support of the package, speaking of the "need to act quickly, to soften the blow of the global financial crisis on vulnerable Australians".
The building industry, too, was relieved. Housing Industry Association head Ron Silberberg, said the plan would provide more than 35,000 jobs in the building and related industries.
The compromise came just 24 hours after the Bureau of Statistics reported that another 36,800 Australians had joined the nation’s unemployment queues last month. The National Australia Bank also said yesterday that its latest quarterly survey showed that business confidence hit its lowest point ever, in the final three months of last year. Indeed, the bank said the economy might even have gone backwards over that period.
While that is yet to be confirmed, if the economy did shrink for that quarter then Australia would already be well on the way to joining other Western economies in outright recession.
Donate To New Matilda
New Matilda is a small, independent media outlet. We survive through reader contributions, and never losing a lawsuit. If you got something from this article, giving something back helps us to continue speaking truth to power. Every little bit counts.